Alternate airport tax for domestic airport development adopted into law

Alþingi (Parliament) has approved the Minister of Infrastructure‘s parliamentary bill on the management and development of airports and air navigation services, thereby creating a comprehensive legal framework for this topic to replace a scattering of provisions. The law will come into effect on November 1st this year.

This law introduces a new alternate airport tax which is intended to react to and ensure financing of infrastructure development at domestic airports. The aim is that these airports will adequately perform their role as important gateways into the country and as alternate airports for Keflavik Airport.

“The new alternate airport tax will enable us to finance the future development and maintenance of domestic airports,” says Minister of Infrastructure Sigurður Ingi Jóhannsson. A parliamentary resolution on the 2024-2038 Transport Policy Plan, recently presented by the minister, announced a great increase in funding for domestic airports through this new way of financing. This will make it possible to undertake important construction work at the alternate airports in Akureyri, Egilsstaðir and Reykjavík.

The alternate airport tax is further elaborated upon in the law. It involves a 200 ISK fee paid by all passengers. However, connecting passengers will only pay for one flight leg.

The main aim of the new law is to ensure that the country‘s airports and air traffic services meet contemporary needs with efficiency and safety at the forefront, in accordance with the government‘s transport policy, as manifested for example in its Aviation Policy and Transport Policy Plan.

Simplifying rules and regulations

The law decrees the termination of out-of-date laws and provisions in this field. This will involve a considerable simplification of the legal framework, while underlining the government‘s tasks in this area more clearly than in previous laws.
General requirements for the management of airports, air traffic control and the provision of air navigation services will remain dependent on law no. 60/1998 on air transportation and regulations based on that same law